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Reliance pips FIs in BSES stakeholding

S Ravindran & Arijit De

The Reliance group has emerged as the largest shareholder in power major BSES, for the first time surpassing the 36.5 per cent combined holding of the domestic financial institutions.

"Reliance's holding has exceeded that of the financial institutions. They hold about half a percentage point more than we do," senior institutional sources told Business Standard.

BSES executives confirmed that Reliance's stake was now higher than that of the financial institutions. However, a Reliance spokesperson declined to comment on the matter.

Even in the first week of March, Reliance said its stake in BSES was around 34 per cent.

The change in shareholding comes at a crucial time for BSES, with its chairman and managing director R V Shahi set to take charge as the Union power secretary next week.

It is not known whether Reliance will seek more nominees on the board of BSES, or seek a major say in the appointment of the new managing director.

BSES has maintained it is a professionally managed company, supported by financial institutions. Reliance refers to BSES as part of its group.

The Reliance group has also stated it plans to route its power projects through BSES.

BSES has decided, in principle, to take over a 48 mw power project at Goa and a 500 mw project at Jamnagar in Gujarat promoted by Reliance.

The Reliance group, which held less than a 15 per cent stake in BSES, made an open offer for an additional 20 per cent in 2000.

It could not mop up the entire 20 per cent because the financial institutions, which held the largest block of shareholders with a combined holding of 35 per cent, refused to sell their shares.

The group has, however, been hiking its stake consistently through the creeping acquisition route since then.

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